Tognum signals to back improved Daimler/Rolls offer

16th May 2011, Comments 0 comments

The management of German motor and turbine maker Tognum signalled Monday it intends to accept an improved offer from the auto group Daimler and Rolls-Royce following a final review.

"Daimler AG and Rolls-Royce Group plc and Engine Holding GmbH have today confirmed in a written agreement with Tognum AG that they will increase the offer price by an additional 8.3 percent to EUR 26.00 per share," the company said in a statement.

A merger of the company with relevant activities already owned by Daimler and Rolls-Royce would create a global leader in the "off-highway" sector of marine, energy, defence and industrial applications.

Late Friday, Daimler and Rolls-Royce said they might increase their offer by 8.3 percent to 26.0 euros for each Tognum share as part of a bid that runs from April 6 to May 18 but which had been rejected by Tognum directors.

Tognum said its executive board and the evaluation committee of the supervisory board met over the weekend and welcomed in principle the improved offer as informally communicated by Daimler and Rolls-Royce.

The amended offer would be reviewed and a statement made in accordance with securities regulations.

"All members of the executive board and the supervisory board holding Tognum shares declared in the Sunday meeting that they will tender their shares subject," following a positive final examination of the amended offer.

Tognum said the improved offer also contains declarations of intent concerning management, investment and potential purchase of the fuel cell business.

Daimler already owns 28.4 percent of Tognum, which employs some 8,700 people around the world, and has a long history with the company.

Having owned it for nearly 50 years, Daimler sold Tognum in 2005 to the EQT investment fund for 1.6 billion euros, only to later buy back around 22 percent in April 2008 for 585 million euros.

Tognum's shares rose 0.50 percent in trading on Monday to 25.92 euros, while shares in Daimler dropped 0.93 percent to 50.09 euros and Rolls-Royce finished the day flat at 648 pence.

© 2011 AFP

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